-assessment report
Allowing the minister with responsibility for the oil and gas sector to have discretionary powers in granting prospecting and production licences affords the opportunity for corruption and bribery – a money laundering predicate offence –says the Money Laundering/Terrorist Financing (ML/TF) National Risk Assessment (NRA) report.
The assessment was compiled by the Anti-Money Laundering and Countering the Financing of Terrorism National Coordination Committee. Its work has been hailed by Attorney General Anil Nandlall.
“The primary legislation that governs the sector appears to allow the minister with responsibility for the sector to have wide powers and discretion. This fragile legal framework provides the opportunity for corruption and bribery,” the report said.
While this may be the case, the opportunities are still not as wide ranging as in the other natural resources and extractive sectors, the report said but noted that there is very little institutional expertise and experience available to regulate, monitor and supervise the International Oil and Gas Companies (IOC) that are operating in Guyana.
Allowing the minister with responsibility for the oil and gas sector to have discretionary powers in granting prospecting and production licences, however is only considered a Medium high risk to money laundering in the sector.
In 2015, the granting of prospecting licences to several companies raised eyebrows and numerous questions which remain unsettled.
According to the risk assessment report released last week, IOC strong-arming and bullying regulators like the Guyana Geology and Mines Commission (GGMC) and the Environ-mental Protection Agency (EPA) is considered a high vulnerability to money laundering in the sector.
“The issues relating to the payment of EPA fines, dumping of produced water, flaring and venting of Natural Gas are current examples of this vulnerability in the sector,” the report said.
Another factor rated as High is the country’s dependence on the IOC to provide information, transportation, accommodation etc. “The Lack of resources/skills to perform critical functions in the sector can lead to high dependency on the IOC,” the report said.
The money laundering threat associated with Guy-ana’s oil and gas industry is Medium according to the Risk Assessment due to ineffective and outdated legislation.
“Although Guyana’s oil and gas industry is relatively new, the legislative and regulatory frameworks currently in place are outdated. There are obvious regulatory gaps in the legislative system as some of the legislation for the sector dates back up to thirty years,” the report stated.
In addition to ineffective and outdated legislation for the sector; no requirement for disclosure of beneficial owner information when applying for a prospecting/production licence; and the limited institutional expertise and experience to regulate, monitor and supervise international oil and gas companies operating in Guyana are contributory factors to money laundering threats associated with the oil and gas industry.
It recommended that efforts to put the requisite laws in place to cater for the emerging oil and gas industry be accelerated to ensure compliance with international standards, the protection of the country’s natural resources, and deterrence of corruption or bribery by public officials in the sector.
The assessment has identified gold smuggling as one of the highest money laundering threats in Guyana.
